Exam 16: Investing in Bonds

During their lifetime,bonds can be sold for more or less than their face value depending on the demand for these particular bonds.

As interest rates rise,the market price of your bond is also likely to rise.

Treasury bonds have all except which of the following characteristics?

The maturity matching strategy involves selecting bonds that will generate payments to match future expenses.

Junk bonds offer a relatively high rate of return,but they are more likely to default than other bonds.

Corporate bond quotations in the daily financial newspapers include all except

The City of Chicago would issue ________ if they wished to borrow money.

If a company's stock price is expected to increase substantially over the next few years,which of the following may entice potential bondholders to accept a lower coupon rate?

If you buy a corporate bond for $970 and sell it six months later for $1,050,you will have

A ________ feature on a bond allows the issuer to buy back the bond from the investor before maturity.

The bond par value or face value is the amount the investor will get paid when the bond matures.

Bonds that may be exchanged for common stock at the option of the bondholders are called

Bonds with a ________ degree of default risk are most susceptible to default when economic conditions are ________.

A call feature on bonds allows the issuer to buy back the bonds from investors before the maturity date.

If an investor purchases a diversified portfolio of bonds and holds them until maturity,the investor is employing the ________ strategy of bond investing.

Another name for high-yield bonds is

To completely avoid the risk of default,investors can invest in Treasury bonds or A-rated corporate bonds.

Ginnie Mae is an example of a bond issued by

The return on bonds currently held will be more favorable if interest rates ________ over the period you hold the bonds.

The coupon rate of interest on a bond is always stated as a(n)